Too Big to Fail: A Misguided Policy in Times of Financial Turmoil

The bailouts carried out by governments for large banks and other financial entities in the recent financial turbulence are often characterized as a Too-Big-To-Fail (TBTF) policy. Proponents of such a policy argue that preventing the failure of large banks (and possibly other financial and non-financial entities) is necessary to limit the impact that such a failure might have on other institutions or on the real economy. Opponents argue that while such a policy might seem attractive in the short run, even given the enormous financial cost to government associated with its intervention, the long-run costs are even larger and are almost always ignored, making TBTF a poor policy choice.Financial Services, too-big-to-fail (TBTF)

Preparations by the Canadian Financial Sector for the Year 2000

This article outlines the extensive work undertaken by the various participants in Canada's financial sector to ensure "business as usual" heading into January 2000 and beyond. The article looks at preparations in the Bank of Canada's own mission-critical systems and at those of the countryís major clearing and settlement systems for which the Bank has oversight responsibility. It also looks at the steps taken by the financial institutions themselves. Contingency planning that takes account of specific year-2000 concerns is also reviewed.

Financial Stability: What It Is and Why It Matters

What is financial stability? What is the role of the central bank and other government agencies in bringing it about? What are the implications for the private sector?monetary policy, financial stability

Core Principles for Systemically Important Payments Systems and Their Application in Canada

Systemically important payments systems are systems that, because of the size or the nature of the payments they process, could trigger or transmit serious shocks across domestic or international financial systems if they were insufficiently protected against risk. This article describes the overall framework of core principles developed for the design, operation, and oversight of such payments systems. The article reviews the role of the task force established to develop the core principles and examines the core principles themselves. It also examines the role of central banks in overseeing major payments systems and in applying the core principles to them. The focus is on the Bank of Canada's oversight responsibilities under the Payment Clearing and Settlement Act and on Canada's systemically important payments system—the LVTS.

The cosomological evolution of the environments of powerful radio galaxies

We present the results from the analysis of 26 extragalactic radio sources of type FRII which were observed with the VLA at 5 GHz and around the 1.4 GHz band. The sources were selected to have redshifts in the range $0.3<z<1.3$, radio powers between $6.9 \times 10^{26} {\rm WHz^{-1}}<P_{151 {\rm MHz}}<1.3 \times 10^{28} {\rm WHz^{-1}}$ and angular size $\theta \ge 10''$. We found that the depolarisation and the rms variations in the rotation measure increased with redshift. The flux values obtained from the observations were used to derive by means of analytical modelling the jet--power, density of the central environment, age of the source and its lobe pressure and the results were then compared with the observations. We find no significant correlations with the density parameter suggesting that the depolarisation and the rms variations in the rotation measure are indicative of the environment becoming more disordered rather than denser. The age and size of a source are correlated and both were found to be independent of redshift and radio--power. Jet--power strongly correlated with the radio--power. The lobe pressure was found to be anti--correlated with size which could explain why there are no sources beyond a few Mpc in size. We found no significant correlation between size and density which demonstrates that the sample is a fair representation of the population.Comment: 2 pages, Cozumel AGN 2003 conference proceeding

Clearing and settlement systems and the Bank of Canada

Clearing and settlement systems are essential to the smooth functioning of a modern market-based economy such as Canada's. During the past decade, there have been significant efforts in Canada and abroad to improve electronic clearing and settlement systems that handle payments obligations, either uniquely or in conjunction with transactions related to the purchase and sale of a broad range of financial instruments such as debt, equity, foreign exchange, or derivatives. This article examines some of the risks faced by participants and end-users of these systems and reviews the Bank of Canada's role in relation to these systems. For a number of years, the Bank has been involved informally with major clearing and settlement systems with a view to ensuring that systemic risk is adequately controlled. In July 1996, the Payment Clearing and Settlement Act was proclaimed. This Act formalized the role of the Bank in the oversight of clearing and settlement systems for the purpose of controlling systemic risk. The article provides an overview of the Bank's responsibilities. It also describes certain new powers that the Act made available to the Bank that could be exercised in its dealings with clearing and settlement systems.

The new sample of giant radio sources III. Statistical trends and correlations

In this paper we analyse whether `giant' radio galaxies (GRGs) differ from `normal'-size galaxies (NSGs) except for the linear extent of their radio structure. We compare a number of properties of GRGs with the corresponding properties of NSGs, and analyse the statistical trends and correlations of physical parameters, homogeneously determined for the sources, with their `fundamental' parameters. Using the Pearson partial-correlation test on the correlation between two variables in the presence of one or two other variables, we examine which correlation is the strongest. The analysis clearly shows that GRGs do not form a separate class of radio sources. They most likely evolve with time from smaller sources, however under specific circumstances. Analysing properties of GRGs and NSGs together, we find that (i) the core prominence does not correlate with the total radio luminosity (as does the core power), but it anti-correlates with the surface brightness of the lobes of sources, (ii) the energy density (and possibly the internal pressure) in the lobes is independent of redshift for constant radio luminosity and size of the sources, (iii) the equipartition magnetic-field strength, transformed into constant source luminosity and redshift, strongly correlates with the source size. We argue that this B_{eq} - D correlation reflects a more fundamental correlation between B_{eq} and the source age, (iv) both the rotation and depolarisation measures suggest Faraday screens local to the lobes of sources, however their geometry and the composition of intervening material cannot be determined from the global polarisation characteristics.Comment: 10 pages, 8 figures, 6 tables. Accepted for publication in A&

The depolarisation properties of powerful extragalactic radio sources as a function of cosmic epoch

We use the observed polarisation properties of a sample of 26 powerful radio galaxies and radio-loud quasars to constrain the conditions in the Faraday screens local to the sources. We adopt the cosmological redshift, low-frequency radio luminosity and physical size of the large-scale radio structures as our `fundamental' parameters. We find no correlation of the radio spectral index with any of the fundamental parameters. The observed rotation measure is also independent of these parameters. The difference between the rotation measures of the two lobes of an individual source as well as the dispersion of the rotation measure show significant correlations with the source redshift, but not with the radio luminosity or source size. Thus the small-scale structure observed in the rotation measure is caused by a Faraday screen local to the sources. The observed asymmetries between the lobes of our sources show no significant trends with each other or other source properties. Finally, we show that the commonly used model for the depolarisation of synchrotron radio emission by foreground Faraday screens is inconsistent with our observations. We apply alternative models to our data and show that they require a strong increase of the dispersion of the rotation measure inside the Faraday screens with cosmological redshift. Correcting our observations with these models for redshift effects, we find a strong correlation of the depolarisation measure with redshift and a significantly weaker correlation with radio luminosity. All our results are consistent with a decrease in the order of the magnetic field structure of the Faraday screen local to the sources for increasing cosmological redshift. (abridged)Comment: 14 pages, 16 eps figures, accepted by MNRA

Radio sources with ultra-high polarization

A sample of 129 unresolved radio sources with ultrahigh linear polarization (>30 per cent) has been selected from the NRAO VLA Sky Survey. Such high average linear polarization is unusual in extragalactic sources. Higher resolution Australia Telescope Compact Array and Very Large Array observations confirm the high average polarization but find that most of these sources are extended. The Sloan Digital Sky Survey spectroscopy, where available, shows that the optical counterparts are elliptical galaxies with no detectable emission lines. The optical spectra, radio luminosity, linear size and spectral index of these sources are typical of radio-loud active galactic nuclei. Galaxy counts within a 1 Mpc radius of the radio sources show that these highly polarized sources are in environments similar to their low polarization (<2 per cent) counterparts. Similarly, the line-of-sight environments of the ultrahigh polarization sources are on average indistinguishable from those of the low-polarization sources. We conclude that the extraordinarily high average polarization must be due to intrinsic properties of the sources, such as an extremely ordered source magnetic field, low internal thermal plasma density or a preferential orientation of the source magnetic field perpendicular to the line of sight.Comment: 23 pages, 15 figures, 6 tables, accepted for publication in MNRAS; v2: some typos correcte